The health and well-being of our California communities is at risk because of climate disruptions. Public pensions can help change the course.
The financial health of pension funds is synonymous with protecting the planet. Yet currently these funds are invested in companies like fossil fuels and private equity-owned healthcare companies.
Public pension funds can ensure retirement security by supporting investments in California’s communities of color, and ending investments with companies that harm our communities.
Photo by Miguel Gutierrez Jr., CalMatters
Unions have fought hard to win and maintain retirement security for members, but failure to address climate change and continued investment in fossil fuels undermines the strength and predictability of pension funds and their ability to fulfill responsibilities to beneficiaries.
Additionally, ensuring that workers’ pension funds proactively work to mitigate climate change benefits all fund participants - current and future - and the greater public.
We know that CalPERS and CalSTRS, the two largest pension funds in California, understand this threat.
In fact here’s what both funds say about climate change:
CALPERS: “Climate change's scale and multi-faceted nature present a systemic risk to our portfolio.”
CalSTRS: “The scale and multi-faceted nature of climate change presents a systemic risk to our portfolio.”
The time to act is now.
Oil and gas companies are increasingly a risky investment, losing money as compared to the S&P 500 and they are being sued by California and at least 40 other entities for the harm they have caused to Californians and the residents of other states and municipalities.
Most recently ExxonMobil sued two shareholders in an attempt to block their shareholder proposal urging the company to accelerate the reduction of greenhouse gas emissions. The Interfaith Center on Corporate Responsibility, which represents investors and institutions with some $4 trillion in total assets, noted that this type of legal action is extremely rare and is a “serious threat to shareholder rights and a clear message that the company is seeking to shut down any debate by its shareholders on actions needed to address climate risk.”
In November, CalPERS pledged a commitment to climate policies in order to best protect retirement security for its beneficiaries. Their proposal included $100 billion in sustainable investments that the coalition believes should include investments in California’s communities of color, and ending investments with companies that harm our communities.